A cynical commentary about developments in the South African financial markets and the incomprehensible activities and pronouncements of bureaucrats and politicians.

Friday, 31 July 2015

ALL HANDS TO THE PUMPS

Despite some very wild share price swings
in the last few weeks, the JSE’s All Share index total return for July is going
to emerge very close to zero! Some short term traders and punters are going to
dispute the news, but most investors will see little change in their valuations.
This may change quite alarmingly by year end however, as a number of chickens
appear to be searching for roosts.

Only properly trained economists believe
that there is any real value or truth in the deluge of figures that swamp us
every minute of the day. Other people have long doubted that China really was growing as fast as its leaders
claimed, or that Greece
(and many other countries besides) has any intention or ability to repays its
debts. And then there’s all this talk of the USA raising interest rates and the
European Central Bank indulging in a spot of quantitative easing (which is
jargon-speak for minting cash that is used to buy near worthless IOUs from
profligate governments).

It seems as if nobody needs or more
importantly wants to own Rands at the moment.The talking heads are offering complicated
explanations for the plunging currency all of which boil down to sellers having
to offer buyers more and more Mandela’s in return for a single one of their
George Washington’s or Queen Elizabeth’s. This declining interest in possessing
rands is double-sided as well. That is, locals are trying to get hold of
foreign currency and foreigners have no need of runts as demand for our
products declines and our immigration authorities have become rather
unwelcoming. It’s all rather alarming, particularly as the communists who
control our government seem to be either unaware of or content with
developments.

There are many very sad illustrations of
how times and fortunes change of which amongst the most poignant for South
African share holders must be Anglo American. This one-time behemoth of the
open outcry market in Diagonal
Street, and other venues before that, is now no
longer even in the top ten on the JSE ranked by market capitalisation. At
R220bn it is way less than even half the value of either Glencore or BHP
Billiton. This week Anglo’s CEO went on stage to explain what needed to be done
by both him and the government to try and stem the rot. It’s not even certain
that a huge and certainly unexpected surge in the prices of all the minerals it
mines would help. This empire is declining. "O tempora o mores"

Poor old Number 1. How embarrassing and
ignominious for him to have his very modest and quite tacky private swimming
pool shown to the world. Yet another thing for his BRICs colleagues to snigger
about. He really does choose his advisors poorly. This time it’s his architect
who’s let him down, although the saving grace is that it was the taxpayers who
got shocking value for money.

For centuries, opponents of the idea of a
tunnel under the English Channel cited the
problem of unwanted pests like rabid dogs and onion-draped French hawkers
swarming onto the “sceptred isle”. No one predicted the astonishing scenes of
desperate African refugees overwhelming the noticeably sparse number of French
police at Calais.
Despite claims of European solidarity in dealing with the problem, the
Continental countries must be rather relieved to watch these poor souls
disappearing down the tunnel.

Trite but true. Cricket is a really funny
old game. But best not played in a place and time where the Monsoon is likely.
Given a full 5 days of play Bangladesh
would be rather tricky to subdue. And now what’s going on with The Ashes? Such massive
changes of fortunes feel very odd. Surely there’s no FIFA-like match fixing likely?